The fate of Greece rests in the hands of a newly elected far-left leader, Alexis Tsipras, propelled to power on a platform that Greece could no longer support her international loan agreements. The anti-austerity, leftist coalition, Syriza, emerged surprisingly strong after this past weekend’s poll, winning 16.8% of the vote.
News of Greek anti-austerity measures comes in tandem with rumors and speculation that Greece could exit the euro as early as next month. Failing a bailout from either the IMF or the European Central Bank, Greece could be out of money by as early as June. Others, however, take a more optimistic view of the situation; rather than prompting a Greek exit, recent elections in France and Germany may make total austerity less workable, forcing politicians to focus on policies of growth while maintaining the single currency.
The greatest underlying thread to all of this debate is the unwillingness of the major European players, namely Germany, to ever commit to a euro bond scheme. Meanwhile, as the Greek drama unfolds, world markets await with bated breath to see how things ultimately play out. Some speculate that the chaos roiling through Greek society and markets could result in yet another election and a new government. Reports suggest that the leader of the socialist PASOK, Evangelos Venizelos, refuses to abrogate Greece’s debt repayment agreement terms and reiterated his conviction that Greece must have a broader coalition in government and promote growth within the euro.
Meanwhile, Alexis Tsipras had this to say:
The bailout parties no longer have a majority in parliament to vote for measures that plunder the country…
Alexis Tsipras’ historic mandate to form Greece’s first leftist coalition since 1989 promises a full rejection of the debt settlement terms. Antonis Samaras, leader of the New Democracy party, came ahead of all other parties in general polling but failed to form a coalition government and thus returned the mandate to Greek President Karolos Papoulias. The neo-fascists of the ‘Golden Dawn,’ led by Chryssi Avgi, will be excluded from talks to form a government. Once again, Greece brings Europe to the precipice of potential economic chaos for the one currency market.